From Ground to Gate: A lifecycle assessment of petroleum processing activities in the United Kingdom

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From Ground to Gate: A lifecycle

assessment of petroleum processing activities in the United Kingdom

Reyn OBorn

Master in Industrial Ecology

Supervisor: Anders Hammer Strømman, EPT Co-supervisor: Olav Bolland, EPT

Department of Energy and Process Engineering Submission date: June 2012

Norwegian University of Science and Technology

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Abstract

Petroleum products are an important component of today’s societal energy needs. Petroleum powers everything from the vehicles people rely on, to the ships that carry goods around the world, to the heating of homes in colder climates. The petroleum process chain is complex and the

environmental impacts within the process chain are not always well understood. A deeper

understanding of where emissions come from along the process chain will help policy makers in the path towards a less carbon intensive society.

One of the core processes of the petroleum process chain is refining. Petroleum refining is a complicated process which can have varying crude inputs and varying fuel outputs depending upon the refinery make-up, the crude blend and the market conditions at the time of production.

The goal of this paper is to introduce a lifecycle analysis on the UK petroleum refining sector. Where emissions occur along the process chain and which fuels cause the most pollution on a per unit basis will be reported and discussed using lifecycle analysis framework. The refining process is difficult to maneuver around and it can be difficult to discern which processes create which products. The analysis is broadened to understand the refining emissions associated with different fuel types at both a process and country level. The results can be relevant for environmental policy and decision makers.

The original intent of this paper was to include gas processing. After discussion between advisor and student, the gas processing was not included after mutual agreement.

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Acknowledgements

This study could not have been organized without the guidance of Anders Hammer-Strømman who was the main advisor for all work. Nick Vandervell and Andy Roberts of UKPIA were the sources of much information. The work of DECC provided the basis for comparison while the NAEI had the necessary refinery information to perform analysis. Anthony Pak must be thanked for his previous work on UK petroleum extraction which was used in this study. Additional thanks to Vladimir Volsky, who helped shape the dialogue of the paper and provided personal guidance when asked.

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List of figures

Figure 1 - The simplified petroleum process chain ... 7

Figure 2 - UK total production and CO2 emissions per kt ... 8

Figure 3 - Overview of main emissions data sources ... 10

Figure 4 - Petroleum distillation column (Energy Institute) ... 13

Figure 5 - Typical Petroleum Refinery Configuration ... 14

Figure 6 - Petroleum production by fuel type and total (in kilotons) in the UK, 1995-2011 ... 16

Figure 7 - Petroleum production and consumption patterns, UK, 2005-2011 ... 18

Figure 8 - Diesel and Petrol demand and production, UK, 2005-2011 ... 19

Figure 9 - Gross combustion emissions of petroleum fuels by type, UK, 2000-09 ... 20

Figure 10 - Map of refineries in the UK ... 21

Figure 11 - Statistical overview of UK refineries ... 21

Figure 12 - Mt CO2-eq total for all refineries in the UK, 1990-2010 ... 22

Figure 13 - Ground to Gate Petroleum Refinery Process Flow Diagram ... 23

Figure 14 - Lifecycle assessment framework ... 27

Figure 15 - UK Refinery throughput and and output of petroleum products ... 28

Figure 16 - Refinery Output and Product mix, source of information ... 28

Figure 17 - Fuel output mix, scenario model refineries ... 30

Figure 18 - Process requirements matrix ... 31

Figure 19 - UK Fuel prices and calorific values ... 35

Figure 20 - Proportion of fuel output, UK, 2009 ... 40

Figure 21 - Petroleum production in the UK, throughput and net output, 1995-2011 ... 41

Figure 22 - g CO2-eq per kg refined fuel, by refinery 2009 ... 42

Figure 23 - g CO2-eq per kg net fuel ouput per Nelson Index number ... 43

Figure 24 - Kt CO2-eq and kt CO2-eq per Kt net refined fuel, 1995-2011 ... 43

Figure 25 - g CO2-eq range and average per MJ by fuel type ... 44

Figure 26 - g CO2-eq per MJ, by main processes, by fuel type ... 45

Figure 27 - Normalized CO2-eq emissions from the direct refinery process ... 46

Figure 28 - Normalized refinery emissions between petrol and diesel, per MJ net fuel output ... 47

Figure 29 - Characterized emissions by fuel type, UK scaled total, 2009 ... 48

Figure 30 - Reported output (Kt) by refinery, UK, 2009 ... 50

Figure 31 - CO2-eq share of total refining industry direct emissions, by refinery, 2009 ... 50

Figure 32 - g CO2-eq per MJ net fuel output by scenario refinery ... 51

Figure 33 - Normalized values of impacts for Petrol refining, by scenario refinery... 52

Figure 34 - g CO2-eq per MJ net fuel output between EcoInvent and study ... 53

Figure 35 - Normalized CO2-eq per MJ net fuel output, EcoInvent and study ... 54

Figure 36 - g CO2-eq per MJ net fuel output, study and DECC ... 55

Figure 37 - Normalized CO2-eq per MJ net fuel output, study and DECC... 55

Figure 38 - CO2 emissions comparison between studies ... 56

Figure 39 - Summary of impact assessment calculations for main study, per MJ net fuel output ... 60

Figure 40 - Lifecycle analysis of the Mercedes C-Class ... 64

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List of abbreviations

UK United Kingdom FDP Fossil depletion

DECC UK Department of Energy and Climate Change FETPinf Freshwater ecotoxicity UKPIA UK Petroleum Industry Association FEP Freshwater eutrophication NAEI UK National Air Emissions Inventory HTPinf Human toxicity

OPEC Organization of Petroleum Exporting Countries IRP_HE Ionising radiation

LCA Lifecycle analysis METPinf Marine ecotoxicity

LCI Lifecycle inventory MEP Marine eutrophication

CO2-eq Carbon dioxide equivalent MDP Metal depletion

DERV Diesel engine road vehicle (fuel) NLTP Natural land transformation

LDF Low density fuel ODPinf Ozone depletion

MDF Medium density fuel PMFP Particulate matter formation

LPG Liquid petroleum gases POFP photochemical oxidant formation

CHP Combined heat and power TAP100 terrestrial acidification

GHG Greenhouse gas TETPinf terrestrial ecotoxicity

EFQ European Fuel Quality Directive ULOP urban land occupation

ALOP Agricultural land occupation WDP water depletion

GWP Global warming potential

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Introduction

Currently the world is facing a crisis between the limits of nature and the ambitions of mankind.

Anthropogenic pollution is slowly altering the earth’s natural systems where the outcomes and impacts can have grave effects. Most notably, climate change from the release of carbon dioxide and other pollutants can create complex problems for society as it is known today. Social upheavals, widespread agricultural duress, and the large scale destruction of human and economic

infrastructure are all possible outcomes of an altered climate. It is up to humans to first understand how and where this pollution is occurring and then to use this knowledge to create sustainable economic and social systems.

One of the major drivers of climate change is the use of fossil fuels. Direct combustion of fossil fuels is the most well understood part of the petroleum fuel process chain but what is less understood is the emissions associated with other links in the chain. The combustion of fossil fuels is not the complete picture. Extraction, refining, distribution and other processes make up the petroleum process chain and each process contributes to the indirect emissions of fuel usage. Ignoring the rest of the picture is like eating an apple but not acknowledging it came from a tree. Understanding this picture requires analysis and understanding the emissions along the process chain requires lifecycle analysis. This paper focuses its lens on the United Kingdom (UK) and the petroleum processing industry there.

The European Union strives to reduce GHG emissions and reduce human health impacts through a program known as the European Fuel Quality Directive (EFQ). The EFQ places a burden on parts of the petroleum process chain but specifically targets petroleum suppliers to reduce lifecycle GHG emissions by minimum of 6% by 2020 from 2010 levels (European Union, 2009). How this is done depends on the refinery producers. The first step is determining where in the process chain emissions can be reduced and how the UK petroleum producers can meet the emissions reduction targets of the EFQ while providing fuels. The EFQ is an important impetus for producers to reduce their impacts as the production of petroleum can constitute nearly 10% of the lifecycle GHG emissions of a car and upwards of 90% of the non-methane volatile organic compounds

(DaimlerChrysler AG, 2006) . The petroleum processing industry in the UK and around the world must focus their efforts to reduce emissions.

Overview of Petroleum Activities in the UK

Petroleum was first discovered in the North Sea region of Europe more than 40 years ago and has transformed the region to a highly developed energy economy where petroleum extraction and

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7 processing forms one of the major cogs. As part owner of the North Sea petroleum reserves, the UK has found itself a major player in the petroleum industry worldwide.

Domestic extraction, world class refining plants, and large quantities of domestic consumption have allowed for the UK economy to flourish since petroleum extraction began in the 1960s. The UK petroleum sector has been well organized to allow for the vertical integration of the process chain with more than 100 offshore extraction units, 40,000 km of pipeline, 8 major refineries and more than 5500 distribution points for petroleum products. The UK economy is heavily reliant on the petroleum process chain attributing more than 200,000 jobs directly from the process chain with another 100,000+ as spin-off jobs (Oil and Gas UK, 2011). The petroleum refining industry constitutes a major part of the UK petroleum sector both in terms of economic activity and emissions.

The UK petroleum industry follows a process chain that involves extraction, processing (refining), distribution and delivery to the end user for combustion. Although this is a grossly simplified process chain, it is a common process chain among all petroleum producers worldwide. A summary of this simplified process chain is found below.

Exploration and

Extraction Refining Distribution and

Marketing Delivery to End User

Combustion

Figure 1 - The simplified petroleum process chain

When petroleum is extracted from the ground, it emerges as a crude mixture of differently

sequenced carbon bonds that have to be separated. To separate this crude mixture into something palatable for combustion, it must go through a petroleum refinery. Operating a petroleum refinery requires energy, infrastructure, land and other inputs to create the various outputs required by industry and consumer alike. The petroleum refining process is also quite often complex, meaning that inputs do not always have a clear path to specific outputs. Outputs are co-products which means that assigning environmental impacts to different refining processes or different outputs becomes tricky. Nonetheless, refining is a critical part of the chain, without which, almost no crude can be used for meaningful combustion.

The UK processes more than 70,000 kilotons of crude petroleum every year with most of it extracted from North Sea platforms located in British and Norwegian waters (UK Department of Energy and Climate Change, 2009). In recent years the refining industry has faced declines due to reduced output from North Sea fields and from reduced consumption in the domestic economy. All told, this has also reduced CO2 output to the atmosphere due to refining. This reduction comes with a caveat,

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8 however, as the CO2 emissions per unit have been steadily increasing. The UK refining industry has become less environmentally efficient on a per unit basis (UK Department of Energy and Climate Change, 2012).

The chart below summarizes these trends. On the left axis is total crude throughput in kiltons broken down between crude that is used as energy in the refining process (feedstocks) and crude that becomes output to the market (net output). The right axis has kilotons of CO2 per kiloton refined fuel.

Figure 2 - UK total production and CO2 emissions per kt

As shown on the chart, UK refinery output has been trending a steady decline from a ten year peak in 2004 to current levels today. This trend is set to continue. Curiously, the direct CO2 emissions from the refining process are increasing on a per unit basis. The direct emissions from refining are somewhat understood but the data is missing the other indirect emissions.

State of the field

The UK Department of Energy and Climate Change (DECC) is responsible for reporting on all things related to energy in the UK. As part of their mandate, the DECC releases a comprehensive report on all aspects of energy production every year (UK Department of Energy and Climate Change, 2009).

This report is accompanied with data relating to the report and its findings. There is always a chapter dedicated to the petroleum industry which outlines the entire process chain on a macro-level. The report describes the quantitative information in a broad sense, describing all manners of production data, consumption patterns, extraction production figures and more. The report does not delve in to depth on individual or plant-level figures but instead is a glimpse of the industry as a whole.

0,18 0,19 0,20 0,21 0,22 0,23 0,24 0,25

- 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 100 000

Total net output of petroleum products (kt) Total petroleum feedstocks (kt)

kt CO2 per net kt refined fuel

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9 Additionally, data which is available in bulk form is often not of the highest resolution to garner meaningful information from.

On the converse, the UK National Atmospheric Emissions Inventory (NAEI) offers more localized data that can offer more resolution on the point source air emissions released by industrial operations in the UK. The NAEI is a government program which records air emissions information from industry and compiles this information on a registry (AEA, 2009) . The organization is a joint effort between all UK governments and covers emissions for the entire UK. The NAEI has only recently begun with the efforts of recording these emissions, which are usually industry reported or sometimes estimated by the organization. The NAEI has comprehensive, point source information for most industrial

operations but only for the year 2009. This data is available in bulk download and contains a wealth of information but it does not offer very much in the way of process separation. Each industry source is broken down into one or two categories which are reported. Generally, these categories are

“emissions from combustion” or “other emissions”, which again do not offer a deeper understanding of how or where the emissions are greatest.

The EcoInvent database has a large mix of inventory data pertaining to petroleum products and their environmental emissions. EcoInvent has two sets of figures for six major fuel types: petrol, diesel, heavy fuel oil, light fuel oil, naphtha and butane/propane. The fuel oils, diesel and petrol inventories also have additional information on which processes they follow after primary separation depending on the sulfur content, which may or may not need to be removed. The main EcoInvent data comes from European averages and is reflective of Europe in general but not the UK specifically. The EcoInvent data makes some fairly robust assumptions which are not necessarily indicative of specific refineries or production in specific countries. The EcoInvent inventories also contain information on Swiss refineries, but this data is only specific to that country. That means that the EcoInvent

inventories do not have specific information relating to UK petroleum refining operations.

Furthermore, much of the data for refining comes from the year 2003 or earlier, which is outdated for today’s refining industry (Frischknecht, 2007). Given the trends in the UK industry, refining production today has changed greatly from years prior.

The state of the field is such that UK refining emissions are known in certain capacities but unknown in others. An outline of the known inventory data is shown in figure 3.

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Data source Data type Latest Year Data scope

DECC Overall UK emissions related to refining 2011 Only CO2 emissions, not process specific NAIE Overall emissions by refinery 2009 Only emissions to air, not process specific EcoInvent Average European emissions per unit fuel refined 2003 Comprehensive but not UK specific

Study Average UK emissions per unit fuel refined 2009 Comprehensive and UK specific Figure 3 - Overview of main emissions data sources

There are several studies that utilize EcoInvent data for determining the impacts of refineries.

Besides using EcoInvent data and setting up a system based on emission outputs, one can also analyze the energy inputs to production to approximate direct emissions.

In the Venkatesh et al study “Uncertainty Analysis of Life Cycle Greenhouse Gas Emissions from Petroleum-Based Fuels and Impacts on Low Carbon Fuel Policies”, the main method for determining emissions output comes from energy use and fixed energy emission values (Venkatesh, Jaramillo, Michael, & Matthews, 2011). The study emphasizes energy use above all else and uses a system boundary that is from well to wheel such that there is no breakdown between processes.

Additionally, the study comes from the United States and uses time series data that is from 1998 to 2008 respectively.

Another study that follows the same energy input rubric is the study by Wang et al called “Allocation of Energy Use in Petroleum Refineries to Petroleum Products” that analyzes energy usage from well to pump (Wang, Lee, & Molburg, 2003). The Wang study implements the same model as the Venkatesh study except that it separates the emissions more cleanly by process and uses older data from 1996 and 1999 within the geographical boundaries of the US. For this study and others like it, the GREET model for energy usage was used. The Venkatesh study also uses the GREET model.

Both the Venkatesh and Wang studies are good bases to work from but they neglect the entire emissions picture. These studies are only interested in the CO2 emissions and are based solely on energy inputs. They offer a small glimpse of how different fuel types produce different emissions but are not inclusive of all processes within a refinery.

As far as product lifecycles are concerned, Mercedes Corporation analyzes the full lifecycle emissions of their vehicles through lifecycle analysis studies (DaimlerChrysler AG, 2006). These studies are relevant because they encompass the energy production within the lifecycle impact assessments and work with a wider scope. These studies do not go into detail on petroleum processing but are at least useful when trying to decipher the petroleum processing impacts in the lifecycle use of products.

What Mercedes has accomplished is a presentation of relevant lifecycle emissions for their vehicles

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11 which includes emissions from petroleum processing but not at a level of resolution that can be used by petroleum producers.

Motivation

In order for refining firms to fulfill their obligations to the European Fuel Quality Directive, refinery emissions must be isolated on a level that can help refiners pinpoint and reduce their impacts. The fuels which offer the greatest environmental efficiency must be promoted for production and the technology that reduces emissions the most must be implemented. Higher resolution on emissions must be the first step in determining where to reduce impacts.

The main purpose of this study is to determine the environmental impacts of the petroleum industry from the point of extraction to the gates of the refinery. The results should be compared to what exists in the field presently and used to provide a base from which the UK petroleum industry can be compared to other refining nations. Additionally, technology implementation should be analyzed so that the best information can be made available based on the results of the study.

The current data that is available and the information that is known provide a weak basis for determining how environmental policy makers ought to work with UK refiners. In order to

understand which fuels are less environmentally intensive, a full picture of the process chain needs to be made. Refining emissions inventories in their current form do not assign emissions based on fuel type outside of the combustion phase. This is not a fault of the organizations dedicated to environmental protection and monitoring in the UK but rather something that has not been deeply examined. Therefore the purpose of this study is to try and determine how UK refinery emissions can be broken down and how the processes leading into refining affect the overall emissions reported.

There exists information on refining on a national level and information on a plant level but the resolution is not much greater than that, or if it is available, it comes from non-UK specific sources that do not focus on the UK. Barring the difficulties of determining specific process emissions, this project is designed to decipher the emissions on an output basis. That is to say, which petroleum products, create the greatest emissions when produced.

There is a lack of resolution from the data that is currently available. An environmental policy decision maker can discuss which fuels are the most emissions intensive at the point of combustion and have a general sense of the emissions further up the process chain but without greater

resolution, these decisions come from only partial information. The need for this information comes from a desire to have greater congruity with the environmental reality. Without the relevant

information, misinformed decisions can be made.

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12 The results from this study are meant to give greater depth of understanding to environmental policy decision makers and researchers alike. The focus will be placed on the UK petroleum refining sector so as to contribute a link to the complete petroleum process chain in a major petroleum producing and consuming country.

The gaps that it begins to fill include increased resolution on fuel types, increased resolution on cradle to refinery gate emissions, and increased resolution on technology choices for UK refining. All of this analysis is an attempt to improve upon the information that relates to UK refining and petroleum processing. With greater information available, more insightful decisions can be made regarding fossil fuel usage in the UK.

Case description

The petroleum processing chain follows the typical trajectory of a production chain. The first phase is extraction from the geosphere, followed by processing, distribution, retailing then finally the use phase with transportation between each point. While it is quite simple to break down the stages of petroleum processing chain, it can be more difficult to break down the sub-processes that occur at each stage. In the processing portion of the chain (refining), more often than not it is nearly

impossible to assign shares of resource usage and emissions for different fuel types. This is because the entire operation can be thought of a single series of co-products. To help understand why this is, it first important to understand how petroleum refining works.

The refining process and theory

Petroleum refining first began in earnest as a value added process in 1856 near the site where the Killingholm/Humber refinery sits today. Today’s refineries are decidedly more sophisticated than in 1856 and rely on a fixed configuration that produces fixed output depending on the quality of the crude inputs and the capacity of the refinery. There are several processes involved in processing crude inputs to make them useable and marketable fuel outputs.

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Figure 4 - Petroleum distillation column (Energy Institute)

The main refining processes can be described in terms of the order in which they occur. The most common form of petroleum refining is known as fractional or atmospheric distillation, which involves pumping the crude petroleum into the bottom of a heated column and then separating the fuels via different temperature levels (Energy Institute). The UK has a distillation capacity of 86 million tons of crude petroleum annually (UK Department of Energy and Climate Change, 2009). The distillation process is the primary process for all refineries in the UK and is summarized visually in the figure below.

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Figure 5 - Typical Petroleum Refinery Configuration

(UKPIA, 2012)

All fuels go through the initial distillation process to separate from crude oil on the way to further processing. The residue of the distillation column, much heavier than crude oil is then sent to a second distillation unit while the other fuel products are sent to other processes. The lightest

products, liquefied petroleum gases, mostly butane, propane and naphtha require little to no further processing in order to be sold to market. However, other products require more processing in order to become marketable.

The main fuel products can be classified in the same way as the distillation column for simplicity’s sake. The lighter products within the column rise while the heavier products sink. The additional processing that occurs can be summarized by fuel type and carbon structure.

Liquid petroleum gases (LPG) are most commonly in the form of naphtha, butane and propane. LPGs typically require little to no further processing except for sulfur removal. Sulfur removal

(desulfurization) is also entirely dependent on the source of the crude and how much sulfur it contains.

Petrol is generally removed from the distillation unit and cleaned in what is called a unifiner. A unifiner removes sulfur and nitrogen compounds in the fuel and creates hydrogen sulfide and ammonia as wastes. Then the molecular structure is modified to increase the octane levels of the fuel so that it is suitable for combustion in motor vehicles and other petrol burning engines. Sulfur is

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15 a by-product of this process and is recycled in other processes or sent to waste processing. Petrol can also be separated from the heavy distillate residues through a process called catalytic cracking.

Generally the more complex plants have catalytic crackers and are capable of refining heavier fuels.

Catalytic cracking is an additional process and while adding value, also adds cost and emissions. The last step in petrol processing is fuel blending as required by national fuel specifications guided by the European Fuel Quality Directive.

Jet fuel and kerosene are generally grouped together because they have a similar carbon structure.

They emerge from the distillation process requiring desulfurization. This is done through what is known as a merox unit, which washes the fuel with sodium hydroxide (caustic washing) and other additives which also help to reduce the impurities in the fuel.

Diesel and gas oil are used for combustion engines and heating purposes mostly. They require post- distillation processing in a unit known as a hydrotreater. The hydrotreater removes sulphur and other impurities using hydrogen recycled from other processes as a catalyst. The diesel and gas oil is typically ready for market after this process.

Fuel oils are generally used for heating and ship transport. These fuels require additional distillation through a process known as vacuum distillation. Vacuum distillation is a similar process to the primary distillation process except that the pressure within the distillation column is greatly reduced so that additional lighter fuels can be separated and captured for further processing. The lighter fuels that come out of the vacuum distillation unit are sent to a catalytic cracking unit and separated by fuel type to go through the remaining refining processes. The heavier fuels, or residues, from the vacuum distillation process are sent to a visbreaker. A visbreaker involves heating the heavy fuels to a very high temperature until they become less viscous. The products from the visbreaker are mixed with other products to make fuel oil blends that meet national fuel specification. Lubricants are also made through the process but not blended with other fuels.

The production process for each fuel chain is known with certainty but the problem is that there are many different outputs depending on the configuration of a refinery or the blend of crude oil which is inputted. Each refinery has a fixed proportion of output and will produce fuels based on the fixed configuration and infrastructure in place. It can be difficult to discern exactly which product is produced directly from a certain process because of how many processes are shared between products. A discussion on the problem of separating processes is discussed in the methods section.

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The UK petroleum economy

The purpose of this paper is to analyze petroleum refining in the UK and its impacts on the environment. However, it is important to give context to the UK situation based on broad

consumption and production patterns as well as emission patterns. Many factors contribute to the consumption patterns of UK citizens including price, government legislation, infrastructure,

technology among others. Production can be just as affected by those factors but also by others such as labour strife, dwindling petroleum reserves, worldwide market price, profitability, seasonal demand and much more. While the discussion on production and consumption volatility is not a component of this paper, the patterns of petroleum production and consumption are well known in the UK and relevant to environmental policy decision makers.

Refining is a vital part of the overall petroleum industry in the UK and to understand the role that refining plays means understanding the market demands and the limitations of the crude petroleum reserves that operate within UK boundaries. However important the contribution of petroleum production to UK society may be, one simple truth exists in that petroleum production is on the decline, having peaked in the mid-1990s.

The following figure examines this in more detail. The left axis is the measurement of petroleum by fuel type in kilotons while the right axis is the measurement of total net petroleum production in kiltons for the UK. These figures are the final net production (gross production minus feedstock and process loss) and only account for fuels, excluding non-fuel petroleum products such as bitumen.

Figure 6 - Petroleum production by fuel type and total (in kilotons) in the UK, 1995-2011 - 10 000 20 000 30 000 40 000 50 000 60 000 70 000 80 000 90 000 100 000

- 5 000 10 000 15 000 20 000 25 000 30 000

Total output of petroleum products Butane and Propane

Naptha (LDF) Motor spirit

Avation turbine fuel Burning oil

Gas oil DERV oil

Fuel oil

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17 The overarching trend shows the decline of net petroleum product output from a peak of 90,366 kilotons in 1997 to an estimated 70,154 kilotons in 2011 (UK Department of Energy and Climate Change, 2012). This is a decline of 22.4% from the peak total. Most of this decline can be seen in the parallel decline of petrol, as the domestic consumption patterns switch towards using diesel. Most other petroleum products are facing decline with the exception of single year upswings for DERV oil (diesel), fuel oil, and aviation turbine fuel. The general production trend for all fuels is either a long term flattening or decline in production.

The petroleum consumption patterns indicate a shift towards diesel fuel over petrol is due to the changing consumption patterns. Petroleum refiners are acutely aware of the changes in marketplace and rely on thin profit margins and volume sales to remain profitable. Processing the petroleum to meet the domestic and world market needs can be a challenge for UK refiners and a challenge for LCA practitioners to identify where emissions are occurring in the face of a dynamic economic environment.

The UK primary demand for all petroleum products has been on the decline since the year 2005. This is in tandem with the declining production figures and representative of a more energy efficient society. Most of the imports are comprised of diesel which is not able to be produced domestically in quantity to meet domestic demand. Most of the exports are petrol, which is in far greater demand abroad. The UK has remained a net exporter of petroleum products as a sum of all production but have been importing diesel as the North Sea crude that comprises most of the refinery throughput does not contain enough suitable carbon structures for diesel to meet domestic demand nor does the current refinery configuration allow for more diesel to be produced.

The following charts outline the patterns of production and consumption. The first chart is a

summarized picture of petroleum production, primary demand, imports and exports all in kilotons of net refined output over the years 1999 to 2011. The second chart is a comparison between diesel and petrol demand and production in the UK and is also measured in kilotons over the years 2005 to 2011. (UK Department of Energy and Climate Change, 2012)

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Figure 7 - Petroleum production and consumption patterns, UK, 2005-2011

The first chart shows the decline in production and the decline in consumption. The imports are increasing year over year primarily due to domestic diesel fuel demand while exports outstrip imports every year meaning that the UK is a net exporter. Whether this will continue in the future remains to be seen as petroleum reserves decline. It is important to note that this is a gross

estimation of all petroleum products combined and does not differentiate between fuels of differing economic value or usage. To differentiate, a comparative chart of consumption and demand broken down between petrol and diesel is shown on figure 8.

The consumption trend for petrol (motor spirit) shows a steady decline in demand as denoted by the purple bars while diesel fuel has seen an increase over time as denoted by the green bars.

Meanwhile, production of motor spirit has declined slowly while production of diesel shows a flat trend. This indicates that capacity for diesel has largely been reached. This conclusion can be reached because the demand for diesel outstrips domestic production. Anytime the red line is above the purple bars is a point where petrol production is in a domestic surplus. Any time the blue line is below the highest point of the green bars, diesel demand outstrips domestic production. Production and consumption of fuel is important but so are the direct emissions associated with their usage.

0 20000 40000 60000 80000 100000 120000 140000 160000 180000 200000

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

Indigenous Production Primary Demand Imports Exports

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Figure 8 - Diesel and Petrol demand and production, UK, 2005-2011

UK CO2 emissions from petroleum products have been on a sharp decline since 2005. This has coincided with the switch to diesel fuels but has also indicated the overall greater independence from fossil fuels in the UK society. The following chart is a summarization of gross CO2 emissions from combustion by fuel type in the UK for the period 2000 to 2009.

The chart on figure 9 shows carbon dioxide equivalent (CO2-eq) emissions in megatons for the combustion of different fuels. The entire gross emissions due to combustions have decreased

dramatically from a peak of 172.2 megatons in 2005 to 153.8 megatons as of 2009. This is a reduction of 10.7% and a positive sign that UK society is reducing CO2 emissions from fuel consumption.

The switch to diesel from petrol has also made a difference in the combustion emissions that each fuel is responsible for. CO2 emissions for petrol combustion dropped more than 27% from year 2000 to 2009, which is logical given the significant decline in petroleum consumption. Diesel on the other hand has increased CO2 combustions emissions by 28.5% in that same time period. The one aspect of this trend that is encouraging is a decline from 2008 to 2009. How much of this is related to the worldwide economic crisis is unknown due to the absence of more time-series data.

0 5000 10000 15000 20000 25000

2005 2006 2007 2008 2009 2010 2011

Demand of DERV Demand of Motor Spirt

Production of DERV Production of Motor spirit

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Figure 9 - Gross combustion emissions of petroleum fuels by type, UK, 2000-09

CO2 combustion emissions for all other fuels declined at a rate between 3% and 40.5% from 2000 to 2009. This trend could be indicative of many things including more fuel efficient engines, cleaner combustion technologies and an increase in the usage of collective transport. No matter the cause, this is excellent news for UK climate planners.

The emissions reported here are just direct emissions from combustion and do not include other emissions from the upstream processes. Understanding the refining picture becomes more

important now that this base has been established. To answer the questions of how the UK is really doing with regard to fuel usage emissions, it is important to try and map the entire process chain.

Refining is the second step on that chain.

The UK refining sector

There are currently 8 major refineries operating in the UK which comprise more than 97% of all refining capacity in the country. They are located in various regions of England, Wales, and Scotland as shown on the map. The net production of crude oil products, which is a measure of gross

production less process requirement feedstocks and process losses, amounted to approximately 81%

of total capacity for 2009. The chart below shows output as a measure of net output as opposed to gross output. The units for the capacity and output are in tons of petroleum product output (UK Department of Energy and Climate Change, 2009).

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 0 20 40 60 80 100 120 140 160 180

Other Petroleum Products

Aviation Turbine Fuel Burning Oil

Fuel Oil Gas Oil

Diesel Engine Road Vehicle (DERV) Motor Spirit

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Figure 10 - Map of refineries in the UK

The largest refinery both in terms of output and in terms of capacity is Fawley, which is owned by ExxonMobil. The smallest refinery is Milford Haven, which has a capacity of 5.4 million tons annually and produced just over 4.9 million tons in 2009. The most complex¹ refinery is Pembroke, which is owned by Chevron. The average plant was operating at 81% capacity in 2009 (UK Department of Energy and Climate Change, 2012).

Refinery Total capacity 2009 Output Nelson Complexity

Stanlow - Shell UK 12 000 000 9 917 940 7,4

Fawley - ExxonMobil 16 000 000 13 162 449 9,1

Coryton - PetroPlus Intl. 10 000 000 6 710 317 8,3

Grangemouth - Ineos Refining 10 000 000 8 313 201 7,9

Humber - ConocoPhillips UK 11 500 000 9 301 251 5,9

Lindsey - Total UK 10 500 000 8 574 056 8,6

Pembroke - Chevron 10 500 000 9 605 330 11,3

Milford Haven - Murco Pet. Ltd 5 400 000 4 909 289 8,0

Total 86 500 000 70 493 834 -

Figure 11 - Statistical overview of UK refineries

Each of these refineries has a fixed output capacity, meaning that for every barrel of crude inputted, a certain product mix will be outputted. Refineries are generally forced to remain with fixed output unless configurations are changed. The more complex refineries have some flexibility in what they

1 Refinery complexity is graded by the Nelson Complexity Index, which is a measure of how much

infrastructure, processing capacity, input capacity, differences in input crude, and ability to change outputs depending on input crudes and demand requirements. A more complex refinery is specialized and more flexible to choose inputs based on price and outputs based on demand to meet market requirements. It is

advantageous in the refinery business to be flexible in the face of the global pricing of fuels (Reliance Industries Limited, 2009)

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22 can produce but are effectively tied to their configuration until upgrades occur. This offers some economies of scale for the refining industry but that is only in the short term. If market conditions match the refinery configurations, profit margins can be healthy. More often than not, the fixed nature of production capacity causes refineries to be exceptionally vulnerable to dynamic markets and fuel price changes.

In the UK, price volatility caused the closure of Petroplus Teeside refinery in 2008 and could cause the possible closure of Coryton in the future due to market fluctuations and decreasing crude availability from the North Sea (Petroplus International, 2010).The pattern in the UK has been one of consolidation such that the 8 major refiners are not going to be challenged by the construction of any new refineries. Instead, it will be a struggle for the major refiners to remain economically viable.

Figure 12 - Mt CO2-eq total for all refineries in the UK, 1990-2010

The market conditions notwithstanding, petroleum refining still constitutes a major source of air emissions in the UK. The direct process CO2 emissions as a sum of all refining operations have remained relatively constant over time peaking in 1996 at 20.3 megatons while reducing down to 16.5 megatons as of 2010. The following chart summarizes the CO2 emissions in the UK due to refinery production.

The pattern since 2005 is a slow decline of 2.0 megatons of CO2 emitted below 2005 levels, which is a 10.8% reduction of CO2 emissions from direct refinery processing. This is only direct process emissions and does not account for the other upstream processes that are required to supply the refining industry with infrastructure, energy, and other inputs. It is only a measure of CO2 coming from the plants due combustion. This can be improved upon by expanding the system boundaries to encompass other processes important to refining.

0 5 10 15 20 25

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23

Expanding the system boundaries on UK refining

Naphtha

Petrols

Kerosene and Jet Fuels

Diesel and Gas Oils

Lubricants and Other Products

Fuel Oil Butane and

Propane

Residues

Petroleum Extraction

Refinery/RER/I U

Naphtha, at regional storage/

RER U

Chemicals organic, at plant/GLO U

Electricity, medium voltage, production UCTE, at grid/UCTE U

Transport, freight, rail/RER U Transport, lorry >16t, fleet

average/RER U

Chemicals inorganic, at plant/

GLO U

Chemicals organic, at plant/GLO U

Transport, lorry >16t, fleet average/RER U

Transport, freight, rail/RER U

Platform, crude oil, offshore/

OCE/I U Pipeline, crude oil, offshore/

OCE/I U

Refining Process

Well for exploration and production, offshore/OCE/I U

Heavy fuel oil, at regional storage/RER U Diesel, at regional storage/RER

U

0,02 kg

crude oil 1 MJ Net

Fuel

Figure 13 - Ground to Gate Petroleum Refinery Process Flow Diagram

The UK refining sector contributes emissions to the petroleum process chain, but in what proportion to the rest of the chain is unknown. The processes further upstream must be included so that a more robust model can be developed. It is worthwhile to map all of the upstream processes to refining because without the extraction and exploration for crude petroleum, there would be no need to refine the crude. This is the first step to mapping the entire petroleum process chain.

The process flow diagram of the refining industry is a visual representation of the petroleum refining process chain. The system boundaries are the point of extraction to the gate of the refinery. This includes exploration for crude in the form of exploration wells, transport from pipelines and to the refinery, the energy inputs required for both extraction and refining in addition to the chemicals used in both processes. The functional unit is 1 MJ of fuel output.

The extraction process is developed as closely as possible to the actual UK extraction system which encompasses peripheral inputs that contribute to the emissions of the process as a whole. The petroleum extraction process offers higher resolution than the refining process because more

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24 information was available and it is only a single process as opposed to containing a sub-process process chain like refining.

The refining process on the other hand is analyzed as a single “box” model where the sub-processes within this box are aggregated together. The sub-processes are the different processes described in the refining theory section of this paper. The box system for the refining process is helpful when many co-products are involved and when production and emissions data for the sub-processes is unavailable or of poor resolution. Thus the box model is advantageous not for discerning the emissions on each sub-process but rather can be used to look at the fuel types as a whole after allocation..

This system diagram above is actually the common, simplified system diagram for the 8 products in the refining process box. The products included in the analysis are butane and propane, naphtha, petrol, kerosene and jet fuel, diesel and gas oils, lubricants and other products, fuel oil and residues.

These are the main outputs that will be analyzed for this case. With lubricants and residues, a nominal MJ value will be assigned as the use of these products is decidedly not energy based. Using 1 MJ as a functional unit for each fuel also allows the ability to compare emissions between fuel types.

The process flow diagram used in this case study forms the basis of the system being analyzed and provides the best resolution given the information available. It is a visual representation of what is being studied and represents a complete picture of UK refining and its associated upstream processes.

Research goals

The scope of the study has now been introduced. The next step is to identify specific goals of the study. The main goal of this study is to analyze the environmental impact analysis of petroleum refining in the UK. It is important to be able to separate emissions between each fuel type and with the full process chain from “ground to gate” included. To meet the main goal, a series of supporting and ancillary goals are identified to both ensure that the process is complete and useful for decision makers. The added value for decision makers comes in the form of additional scenario analysis and a scaling up of the results to compare with current UK figures.

To have a thorough and meaningful study, a series of objectives must be completed in an organized and time-ordered manner. The first objective is to compile air emissions data from each plant and then couple this with production figures from each plant to use for the lifecycle inventories. Each fuel in the study is analyzed and the environmental impacts organized according to production share.

Supporting this is the compilation of macro-UK data so that plant level production and emissions

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25 data can be reconciled and validated before moving forward with lifecycle inventory (LCI)

construction.

Where data on production is unknown, estimations must occur so that gaps are filled. The same is to be said about the emissions data in that all gaps must be reconciled and validated to match the macro UK production and emissions mix. The validation of this data is integral in providing results which are representative of the entire UK petroleum processing situation.

After validation of the UK production data and emissions data, the construction of multiple LCIs can occur. To supplement the data gaps for emissions and background processes, data from other sources is to be compiled and organized as they pertain to the main petroleum refining process. The compiled data must all be organized according to the functional unit of 1 MJ fuel output.

To compile the emissions data and appropriately assign emissions to specific outputs, allocation must occur. The best method for allocation must be determined and then utilized. When this allocation occurs, the individual LCIs based on each fuel type can be constructed.

The compilation of multiple LCIs for each of the multiple fuel types will be based on the average UK emissions per 1 MJ of each fuel type and will be coupled with upstream emissions information from extraction processes. Background data from the extraction process will be integrated into the individual LCIs to provide depth and scope to the petroleum refining process. Additional data on the background and stressor information will also be added from existing databases where data for this information is unavailable.

Following the compilation of the various LCIs, impact assessment calculations following lifecycle assessment frameworks will occur. These calculations will characterize impacts so that multiple environmental emissions can be plotted together in a relevant way for comparison. The calculations will be through the Leontif inverse method and will be calculated for each fuel type.

Once the impact assessment calculations are complete, the results can be scaled upwards to represent the entire UK petroleum processing industry. The scaled up results can then be compared to the current information available.

After the scaling and comparison, a modification on the LCIs for different production technologies will be organized. This process, called scenario analysis, will subject two refineries with different technologies to the rubrics of life cycle impact assessment in the same process as the UK average emissions per fuel type. The results will be compared on a per MJ out by fuel type to assess the

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26 differences. The differences in emissions will represent the technology decisions by each petroleum refiner.

The results of these impact analyses will then be compared with the results currently in the field. This process, known as benchmarking, will provide context to the results of the impact analyses. The results of this study must be justified compared to these results both quantitatively and qualitatively.

The results will also be compared to a full lifecycle analysis of a particular product which uses petroleum goods so as to provide more context on the impacts of petroleum processing within a larger system scope.

Finally, the last step is a discussion of the results and what they imply for the research that exists, the decisions makers and the petroleum refinery operators. The results of this study are intended to add to the body of work that exists thus far and to create greater information for impact assessors concerned with the UK environmental emissions.

Methodology

Lifecycle analysis process

Life Cycle Analysis (LCA) is the deconstruction of environmental impacts by production tiers to determine where emissions are occurring within a process chain and how these emissions cause environmental stress. LCA is an attempt to first quantify emissions in standard categories and then establish meaning from the results to try to discern where tangible environmental damage is occurring and the resulting effect it will have on an ecosystem. A well-organized LCA can bring to light previously unknown sources of emissions to institute change in production behaviors to

ultimately reduce environmental impacts. LCA helps to give a holistic perspective of a process and its impact on the environment.

The construction and execution of an LCA requires four steps of preparation, calculations and interpretations. The steps are: goal and scope definition, inventory analysis, impact assessment and interpretation. The first step is to determine which processes are going to be included in the system boundaries, known as the goal and scope definition. Inventory analysis is the following step after the goal and scope definition. Inventory analysis is the organization of all data relevant to the LCA and combined into a matrix called the process requirements matrix. Often before inventory analysis can be done, some calculations and conversions need to take place and data must also be sourced and collected. Inventory analysis usually involves compilation of information and data from multiple sources. The impact assessment follows inventory analysis and is a series of calculations which

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27 organize the impacts of each process in the LCI. Part of impact assessment can include building scenarios to compare results. Following the impact assessment is a discussion on what the results mean and what context they should be viewed.

Goal and Scope Definition

Interpretation

Inventory Analysis

Impact Assessment

Figure 14 - Lifecycle assessment framework

The goal and scope definition for this study has already been discussed so the next step is the preparation and construction of the lifecycle inventory (LCI).

Lifecycle inventory preparation

The compilation of the lifecycle inventory (LCI) required two main bodies of information: emissions and production data. This information is required at a plant level to associate and assign emission shares to each fuel type based on refinery output. It also required at a macro level so that the entire UK refining sector can be analyzed. Additional information required for the compilation was

commodity price data, average energy density of each fuel type, and background system

information. The analysis and compilation will focus on data from 2009, as this is the most recent year where information is available with relatively high resolution according to the needs of the project.

The macro level figures were supplied by the UK Department of Energy and Climate Change (DECC).

The DECC is a UK government agency which organizes statistics and reports on UK energy systems and air emissions. The DECC has macro level, time series information on overall UK production and only overall CO2 equivalent (CO2-eq) emissions for the economy on a sector by sector basis. The refined petroleum macro figures were also available on DECC and were organized by fuel type. A sample of this table can be found below.

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28

Figure 15 - UK Refinery throughput and and output of petroleum products

(UK Department of Energy and Climate Change, 2012)

The plant level production information was organized from various annual reports and from

information on the UK Petroleum Industry Association (UKPIA) website as well as statistical reports.

This data was often found to be incomplete and required ancillary work. Most refineries reported a production mix in terms of capacity but not in terms of output, which meant that figures on total output mix were estimated. In half of the cases, overall plant production (overall refinery output) was reported, which could then be used to determine the product mix assuming that capacity production mixes and output mixes were identical.

Refinery Product Mix

Available

Plant Owner (2009)

2009

Output Source(s)

Stanlow Yes Shell Estimated (Essar Energy, 2012), (Donovan, 2011), (UKPIA, 2011)

Fawley Yes ExxonMobil

Co. Ltd Known (Esso UK Ltd, 2011), (UKPIA, 2012)

Coryton Yes Petroplus

International Known (Petroplus International, 2010), (UKPIA, 2012)

Grangemouth Yes Ineos

Refining Estimated (UKPIA, 2012)

Lindsey Yes Total

UK Estimated (UKPIA, 2012)

Pembroke Estimated Chevron

Ltd Known (Chrevron Corporation, 2010), (Valero, 2012), (UKPIA, 2012)

Humber Yes ConocoPhillips

UK Estimated (UKPIA, 2012), (ConocoPhillips, 2011)

Milford Haven Yes Murco

Petroleum Ltd Known (Murphy Oil Corporation, 2009), (UKPIA, 2012)

Figure 16 - Refinery Output and Product mix, source of information

UK R efinery thro ughput and o utput o f petro leum pro ducts, D EC C , 2005-2010 Thousand tonnes

Refinery use Gases Kerosene

Year

Throughput of crude and process oil (kt)

Fuel used in the process

Losses/

(Gains)

Total output of petroleum products

Butane and propane

Other Petroleum

Naptha (LDF)

M otor Spirit

Aviation Turbine Fuel

Burning

Oil Gas Oil DERV oil Fuel oil Lubricating oil Bitumen

2005 86 134 5 602 371 80 161 2 184 427 3 019 22 620 5 167 3 325 9 430 19 056 10 155 936 1 912 2006 83 213 4 879 374 77 960 2 104 661 2 733 21 443 6 261 3 373 10 215 15 821 11 280 617 1 749 2007 81 477 4 682 199 76 596 2 259 517 2 561 21 313 6 176 2 968 10 159 16 232 10 433 547 1 628 2008 80 740 4 752 315 75 673 2 248 449 1 863 20 319 6 549 3 092 10 566 16 194 10 496 514 1 485 2009 75 225 4 399 332 70 494 2 113 445 1 529 20 404 6 022 2 830 9 487 15 906 7 964 530 1 338 2010 73 200 4 478 329 68 394 2 247 516 1 596 19 918 5 781 2 570 9 505 15 332 6 912 412 1 276

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29 The production mix of Pembroke was relatively simple to determine given that the overall production mix of the UK economy was known and that the total output from Pembroke was known and

reported. By having the full UK production figures by fuel types, the remainder not utilized in the production of the other plants would thus be allocated to Pembroke’s production and a product mix of output could be found. The Pembroke plant product mix estimations were only counted as part of the greater UK emission results and were not used for any further analysis.

Estimating the additional output mixes were done on a basis of averaging the remaining output for the four refineries where output for 2009 was not found. The product mixes were available for each of the four refineries and were used to determine the output of each product type after the average output was calculated. The assumption that this makes is that there is a similar output to capacity ratio for each of the four plants with unknown outputs. These four plants were only counted as part of the greater UK emission results and were not used for any further analysis.

Plant level air emission information came from the UK National Atmospheric Emissions Inventory (NAEI). The NAEI organized air emissions data into nearly 50 different categories on a plant level.

Each refinery is required to report emissions to the NAEI which were then published on a publicly available database. There is no distinction on whether the emission reported came from a particular process within the refinery (i.e. fractional distillation versus vacuum distillation) and thus required allocation between the products, which will be discussed further in the next section. The breadth of this data allows for the LCA to provide more complex information on emissions to air in the UK than previously analyzed (AEA, 2009).

Emissions to water are not reported in the UK. All water emissions used in this case come from the EcoInvent database and are included to offer completeness to the LCA study as opposed to

presenting fundamentally new and interesting results. Other background system data came from the EcoInvent database and were again included to offer a more complete picture to the processes involved in refining if not offering fundamentally new information. EcoInvent data was also used for benchmarking the results with the current state of the field (Frischknecht, 2007).

Commodity price information came from the Organization of Petroleum Exporting Countries (OPEC) while average energy content for fuels (calorific values) came from the DECC (UK Department of Energy and Climate Change, 2009) (OPEC, 2009). Both price and energy content is necessary to be able to allocate emissions by refined fuel type and to be able to compare different fuel types with one another when end results are calculated.

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30 Finally, the last core dataset comes from an internal study at NTNU which examines the UK

petroleum extraction sector. The extraction of petroleum fuels captures all of the emissions related through the whole petroleum process chain from extraction to refinery gate (Pak, 2011).

For the scenario analysis, the same data from the main study is used except the focus is on the individual plant production figures instead of UK average figures. Each plant is characterized by differing technologies. Energy for Coryton comes from a 779MW gas powered electricity plant attached to the facility (UKPIA, 2012). The Fawley plant utilizes combined heat and power within the refinery to achieve upwards of 75% efficiency (Esso UK Ltd, 2011). Additionally, each plant has a similar capacity for cracking and conversion and reforming capacities. The major difference between plants is that Fawley has a larger capacity but the product mixes are very similar. Only Coryton has less net output of light natural gases and feedstocks because Coryton uses the output to feed into the gas powered plant.

Figure 17 - Fuel output mix, scenario model refineries

(UK Department of Energy and Climate Change, 2012)

The similarities in output allow for a basis of comparison between the two plants. Additionally, these two plants required no estimation on outputs reducing the uncertainty of the product mix. These two plants make perfect candidates for scenario analysis.

Lifecycle inventory analysis

Inventory analysis is the second step in organizing data for a lifecycle analysis study. An inventory analysis is an organization of all available data into categories that will be used to create a lifecycle analysis. The order in which this data is organized is not necessarily critical to the outcome but it must be organized in terms of the final demand unit, in the case of this study, per MJ and must include data relating to the foreground (direct processes), background (indirect processes related to

29% 30%

12% 12%

9% 8%

36%

27%

11%

17%

7%

1%

Petrol Diesel Kerosene & Jet Fuel

Fuel oil Other products Natural gases &

feedstocks Fawley Coryton

From Ground to Gate: A lifecycle assessment of petroleum processing activities in the United Kingdom